First, of course, is the unemployment rate. “Federal Reserve research concludes that the unemployment rate is probably the best single indicator of current labor-market conditions,” Yellen said. “In addition, it is a good predictor of future labor-market developments. Since 1978, periods during which the unemployment rate declined half a percentage point or more over two quarters were followed by further declines over the subsequent two quarters about 75% of the time.”

But that’s not enough. “The pace of payroll employment growth is highly correlated with a diverse set of labor-market indicators, and a decline in unemployment is more likely to signal genuine improvement in the labor market when it is combined with a healthy pace of job gains.”

Yellen also considers the number of people who want a full-time job but can only find part-time work.

This is the U-6 measure of so-called underemployed, which includes not just those who are unemployed, but those who are “marginally attached” to the workforce as well as those who want a full-time job but can only work a part-time job.

The hiring rate is important way to measure the “dynamics” of the jobs market, Yellen says; it’s not enough that layoffs are down.

The quits rate is important because an increase “would signal that workers perceive that their chances to be rehired are good — in other words, that labor demand has strengthened,” Yellen says.